The hepatitis B virus (HBV) is a major cause of infectious liver disease throughout the world. There are 1.2 million carriers of HBV in the U.S. and approximately 300 million worldwide. Neonatal HBV infection is rarely cleared and as many as 90 percent of perinatally infected children become chronically infected. Therefore, in addition to worldwide vaccine programs to prevent new infections, methods for treating HBV chronic carriers will be necessary to eradicate this disease. This application is focused on understanding the mechanisms responsible for inducing and maintaining chronic HBV infection, and specifically the role of HBV nucleoprotein antigens, the nucleocapsid (HBcAg) and the secreted non-particulate HBeAg. The specific aims are addressed through the use of HBc/HBeAg-expressing and HBV replicating transgenic (Tg) mice, the eight recently developed HBc/HBeAg-specific T cell receptor (TCR)-Tg lineages and various combinations of "double and triple-Tg" hybrids. The specific aims are: (1) production and characterization of TCR-Tg lineages; (2) development of models to explore the relationship between chronicity and perinatal infection; (3) examine the potential of the secreted HBeAg to elicit and maintain immune tolerance and promote chronicity; (4) explore mechanisms that allow HBc/HBeAg-specific CD4+ T cells to escape tolerance induction and co-exist with viral antigens; (5) examine mechanisms by which residual (i.e., non-tolerized) HBc/HBeAg-specific CD4+ T cells cause liver injury; and (6) use the models of liver injury to screen HBc/HbeAg-specific immunotherapies potentially useful in the treatment of chronic infection. It is anticipated that the results of these studies will have diagnostic, therapeutic, and vaccine applications and will provide a better understanding of basic immune mechanisms responsible for viral persistence and clearance in chronic HBV infection.